High Court

II. High Court :

(i) No question of law arising out of Tribunal’s order :
Clearing & forwarding agent :

CCE Jalandhar v. United Plastomers, 2008 (10) STR 229
(P&H).

Respondent acted as consignment agent of IPCL. The issue
involved was that of whether or not the service was that of clearing and
forwarding agent or of commission agent under the Business Auxiliary Service
category.

The Tribunal had upheld the assessee’s plea that the services
did not relate to clearing and forwarding agent’s services and had rejected the
Department’s plea for enhancement of penalty which was reduced by the
Commissioner (appeals). The Tribunal had also set aside penalty levied on
Service Tax for subsequent period on the ground that the same was paid before
the issue of show-cause notice. The Revenue strongly argued in favour of
treating the agreement of the assessee with IPCL as Del Credre agent and
the agreement as distributor to be falling in within the purview of C&F
operation. They further submitted that the Tribunal had placed reliance on the
case of Raja Rajeshwari Ind. Polymers Pvt. Ltd. v. CCE Bangalore, 2006
(3) STR 561(T) itself was appealed against in the Karnataka High Court and also
that the penalty was wrongly deleted by the Tribunal. The provisions of Business
Auxiliary Service were discussed in this context by the appellant and they
relied on Larger Bench’s decision of Larsen & Toubro v. CCE Chennai, 2006
(37) STR 321 (Trib.-L.B). The Court dismissed the Revenue’s appeal, holding that
there was no substantial question of law as the Tribunal had already examined
the expressions ‘directly or indirectly’ and ‘in any manner’ in the definition
of ‘clearing and forwarding agent’, and the Court held that while interpreting
these expressions, they cannot be isolated from the activity of clearing and
forwarding operations and the agent engaged only for processing orders on
commission basis could not be considered as directly or indirectly engaged in
clearing and forwarding operations.

(ii) Import of
services : Effective date :

(Note : The above refers to the Tribunal decision in
Aditya Cement v. CCE, 2007 (007) STR 0153 (Tri.-Del.) where it was held
that since Notification No. 36/2004-ST came into force from 1-1-2005, Service
Tax paid on engineering services received during October and November 2003 under
misunderstanding of law should be refunded).

(iii) Question of law not taken up before lower
authorities — Whether can be taken up before the High Court ?

CCE , Jalandhar v. Onkar Travels P. Ltd., 2008 (10) STR
237 (P&H).

Show-cause notice was issued u/s.74 of the Act to enhance
assessment under allegation of short levy on the assessee who was air travel
agent. Adjudication order confirming the demand and imposing penalty was
confirmed by the Commissioner (Appeals). The Tribunal allowed the appeal, on the
ground that S. 74 dealing with rectification of a mistake is not applicable and
there was no apparent error in the assessment. The Revenue filed appeal against
the Tribunal’s order under the plea that mention of S. 74 was inadvertent in
place of S. 73 and it would not debar Revenue authority from assessing escaped
taxable service. The respondent contended that the plea of wrong provision of
Service Tax was taken for the first time and that throughout the course of
proceedings before the Tribunal and the authorities below, the stand taken by
the Department that invoking S. 74 and passing the order by the Superintendent
was perfectly legal and within limitation period of 2 years applicable to S. 74.
The Court ruled that such question is not permissible to be taken up first time
in appeal. Only substantial questions of law arising out of the Tribunal’s order
are to be considered by the Court and in absence of such ground, the appeal
could not be entertained.